Wall Street News

Top StoriesChina shocks with huge trade miss as exports plunge.
China's exports slumped 3.1% in June, surprising economists who had
predicted growth of 4%, and representing a decline from 1% growth in
May. Imports fell 0.7% in June vs -0.3% in May and forecasts of +8%,
while the surplus grew 33% to $27.1B. The big miss was due to an
underestimation of the slowdown in demand as the stronger yuan and
rising wages hit exports. Skepticism exists about the reliability of the data, especially as China has been cracking down on false invoicing.

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KKR attracts $6B for latest Asia fund. KKR (KKR)
has raised $6B for its Asia II private equity fund, making it the
largest such investment vehicle in the region. The amount tops the $4B
KKR drew in for its first Asia fund in 2007 and the $1B it brought in
for its China Growth Fund in 2010. Valuations have been falling in Asia
due to slowing economies, making investment attractive, although
volatility and strict regulations for foreigners pose challenges.

Top Stock NewsChinese shares jump following trade data. Chinese (FXI) and Hong Kong (EWH)
shares led an uneven charge higher in Asia following trade data that's
so bad it must be good. Surely - so the theory goes - it will prompt
China's leaders to forget all those flighty notions about re-balancing
and pump lots of liquidity into the economy to keep growth ticking
along. Few other markets have been buying it, with Japan, Europe and
U.S. stock futures falling (see below for details).

Yum's China woes seen hitting FQ2 earnings. Yum Brands' (YUM)
FQ2 earnings are due out after the bell, with analysts expecting that
EPS dropped to $0.54 from $0.67 a year ago as revenue fell 7.6% to
$2.93B. The restauranter has had a rough several months in China
following a food scandal involving its KFC chain and an outbreak of
avian-flu in the spring, both of which hit sales badly, although Yum
predicts a turnaround in Q4.

Burberry growth belies Chinese slowdown. Luxury brands listed in the U.S. such as Ralph Lauren (RL) and Michael Kors (KORS) are on watch after revenue at Britain's Burberry (BBRYF.PK)
jumped 18% on year to £339M in FQ1 and beat consensus of £316M, while
comparable-store sales climbed 13%. Of note is that Hong Kong and China
helped drive double-digit growth in comparable sales in Asia, a tale
that contrasts with a fall in Chinese imports in May and June.

The future of U.S. Steel.
A plant with 312 non-union employees in Leipsic in Ohio is "probably
the best, shining example of the direction" of U.S. Steel (X),
says CEO John Surma. The facility makes premium high-margin, customized
products with low-cost, highly automated equipment. The facility
contrasts with other, more expensive and unionized U.S. Steel sites that
employ thousands, yield tiny margins and struggle to compete.

Murdoch to re-testify to U.K. parliament. News Corp. (NWS)
Chairman Rupert Murdoch has agreed to appear for a second time before
the U.K. Parliament following the emergence of a recording last week in
which he indicated that payments to public officials for information was
part of the culture of British journalism. Murdoch's sentiments were
contrary to his tone at a hearing last year, when he said, "Paying
police officers for information is wrong."

GE Capital, AIG "systemically important." As expected, the Financial Stability Oversight Council has officially designated GE Capital (GE) and AIG (AIG)
as non-bank "systemically important financial institutions." The two
will now be subject to Dodd-Frank supervision. Treasury Secretary Jack
Lew called the move "a decisive step to address threats to financial
stability."

Cliffs CEO to retire. Joseph Carrabba plans to retire as President and CEO of Cliffs Natural Resources (CLF)
by December 31 after eight years at the helm, although he's stepping
down immediately as Chairman of the iron ore and coal miner. Lead board
director James Kirsch has been elected non-executive chairman to replace
Carrabba. Laurie Brlas has retired as the head of global operations.
Shares were +1.3% in AH trading.

Top Economic & Other NewsSpanish PM caught up in payments scandal.
With the political crisis in Portugal under control for the moment, the
turmoil has moved to Spain with the re-emergence of a scandal over
illegal payments allegedly made to Prime Minister Mariano Rajoy and
other members of his Popular Party. A ledger purports to show Rajoy
received secret cash payments from 1997-1999, when he was a minister, a
claim the government denies. Spanish shares (EWP) were -1.2% at the time of writing.

Vanguard suffers first net outflows since 1994.
Investors pulled $13.5B from municipal bond mutual funds in June, led
by Vanguard, which saw $2.3B exit. The rush out was second only to that
seen in December 2010, when Meredith Whitney's loud forecast for a large
number of state and municipal defaults spooked investors. In June,
Vanguard suffered its first overall net outflow in 19 years as $9.7B fled its stock and money market funds vs the $9.6B that came in.